UPSC Prelims 2020 Question:

With reference to the international trade of India at present

which of the following statements is/are correct?

1. India’s merchandise exports are less than its merchandise imports.
2. India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years.
3. India’s exports of services are more than its imports of services.
4. India suffers from an overall trade/current account deficit.
   
   

Select the correct answer using the code given below:

Explanation:

• The greatest part of India's current account deficit is the merchandise trade imbalance. According to figures from the RBI, India's total merchandise exports from April through August 2019–2020 were USD 133.14 billion, while its merchandise imports during the same time period totaled USD 210.39 billion. So, statement 1 is correct.
  
  
• Between 2011-12 and 2018-19, the commodity composition of imports shows that imports of iron and steel, organic chemicals, and industrial machinery experienced positive growth rates as a percentage of total imports. So, statement 2 is not correct.
  
  
• India's net services (service exports minus service imports) have been positive. During April-August 2019-2020, India's service exports totaled USD 67.24 billion, compared to USD 39.25 billion in imports during the same period. So, statement 3 is correct.
  
  
• Current Account Deficit (CAD) or trade deficit is the shortfall between exports and imports. As per Economic Survey 2019-20, India’s CAD was 2.1% in 2018-19, and 1.5% of GDP in H1 of 2019-20. So, statement 4 is correct.
  
  

Therefore, option (4) is the correct answer.

Subject: Economics | Foreign Trade and Investment